Moody’s Cuts Whirlpool to B1, Expects Debt to Exceed 10 Times Operating Earnings
Key Facts
Moody’s cut Whirlpool’s corporate family rating to B1 from Ba3 on Wednesday and kept its outlook negative, according to an Investing.com report on the decision. The agency tied the downgrade to weak discretionary consumer spending and a downturn in the housing market, alongside ongoing operational pressures. It also expects adjusted debt-to-EBITDA leverage to exceed 10 times by the end of fiscal 2026. The decision follows quarterly results showing declines in sales and operating profit, and a reduction in the company’s full-year guidance. Whirlpool shares closed at $27.42 on October 27, according to EL7 data.
The company reported net sales of $3.677 billion in the third quarter of 2026, down 8.8% from $4.033 billion in the year-earlier period, according to Whirlpool’s results. Ongoing operating profit fell to $97 million from $180 million, a year-over-year decline of 46.1%. Results missed analyst estimates: ongoing earnings per share came to a loss of $0.21, compared with an estimated profit of $1.04. Revenue was $3.68 billion, versus a consensus estimate of $3.97 billion, according to Investing.com. Company figures show that pressure extended to its core North American business, where major domestic appliance sales fell 8.3% to $2.495 billion.
In the same segment, North American operating profit fell 44.7% to $74 million in the third quarter, from $134 million a year earlier. The company said weak industrial demand drove the sales decline, while it attributed the improvement in operating margin from the previous quarter to price increases and structural cost cuts. It added that the impact of these measures was partly offset by inflation in raw-material, fuel and logistics costs. Whirlpool announced a 7% price increase in its North American major domestic appliance business, effective in the fourth quarter. The company linked the increase to supporting product innovation, as industrial demand conditions continue to weigh on sales.
Whirlpool cut its fiscal 2026 guidance to sales of about $14.5 billion and an ongoing operating profit margin of between 2.0% and 2.2%. The company also expects an ongoing loss of about $1.30 per share, compared with its previous forecast of ongoing earnings of $6.23 per share. The guidance coincides with Moody’s estimate that adjusted leverage will exceed 10 times by fiscal year-end, reflecting the weight of debt relative to expected operating earnings. On liquidity, the agency upgraded the group’s speculative-grade liquidity assessment to SGL-2 from SGL-3. The assessment was based on an expected cash balance of more than $2.0 billion at the end of 2026, in addition to an undrawn $2.0 billion revolving credit facility maturing in 2031.
Chief Executive Mark Bitzer said the recovery is progressing more slowly than expected, adding that cost-cutting and pricing measures "set a clear path for further improvement in 2027." The company aims for these measures to support performance next year, while the announced price increases begin taking effect in the fourth quarter. But the reduced 2026 guidance shows the continued impact of weak sales and margins on full-year results. The effects of pricing and cost cuts are expected to become clearer in coming periods, while Moody’s credit outlook remains negative. This comes alongside the agency’s expectation that adjusted leverage will exceed 10 times by the end of fiscal 2026.